Individuals who have entered into a same-sex marriage are currently treated less favorably for federal tax purposes than under the laws of many states due to the federal Defense of Marriage Act. However, this issue continues to evolve, as illustrated by recent developments in Congress and the Administration. In addition, with an increasing number of states recognizing civil unions, questions also arise concerning the federal tax treatment of individuals (both same and opposite sex) who have entered into a civil union. The IRS has recently weighed in on this topic. Finally, an issue that has gotten a lot of attention recently is whether treatment for gender identity disorder should be recognized as a medical expense for federal tax purposes. This question was answered in the affirmative by the Tax Court and the IRS has now indicated that it agrees with that decision. In the attached memo, we briefly describe these developments, each of which could have a significant impact on the administration of your employee benefit plans.